BJ Q4 2025: Comps Up 12th Straight Quarter, Guides FY EPS $4.10–$4.30
- Robust Comp and Traffic Performance: Q&A participants highlighted sustained and consistent traffic growth—with Q4 marking the 12th consecutive quarter of traffic gains—and strong in-store comp performance, demonstrating resilient customer demand and the effective execution of strategic initiatives.
- Successful Digital Engagement: Executives emphasized that enhanced digital conveniences, including BOPIC, curbside pickup, and ExpressPay, are driving higher basket sizes and increasing engagement, with 90% of digital sales fulfilled in clubs—strengthening the overall growth outlook.
- High-Performing New Club Openings: The discussion underlined an impressive new club performance, with new clubs posting comparably high sales (2-3x the chain average) and a robust pipeline of 25 to 30 future openings over the next two years, indicating significant long-term growth potential.
- Tariff Risks and Supply Chain Disruptions: Executives acknowledged exposure to tariffs that could raise input costs and disrupt supply chains, potentially forcing the company to keep prices low for value-conscious members, thereby squeezing margins.
- Margin Pressure from Rising Costs: Management pointed out that rising commodity costs and tariff uncertainties have already led to compressed merchandise margins, suggesting continued margin headwinds in the near term.
- Execution Risks with Rapid New Club Expansion: Despite strong new club performance, rapid expansion might entail operational inefficiencies and higher initial costs, which could adversely impact near-term profitability.
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Comp Outlook
Q: How were comps and 2025 outlook?
A: Management noted that Q4 comps were robust—with November, December, and a record January—and Q1 traffic momentum remains strong, although they expect the first half to outperform the second half amid some discretionary sensitivity. -
Tariff Impact
Q: How are tariffs and supply risks managed?
A: They explained that tariffs, while capable of raising costs, are managed through limited exposure and strong supplier negotiations, ensuring that member value remains a priority even in inflationary times. -
Digital Growth
Q: What drives digital sales strength?
A: Management emphasized that enhanced app features and services like BOPIC, curbside pickup, same-day delivery, and ExpressPay have boosted digital sales, with about 60% of members engaging digitally to drive top-line growth. -
New Club Performance
Q: How are new clubs performing, and China exposure?
A: They reported that new clubs are achieving around 2–3x chain comp sales with a strong pipeline of 25–30 planned openings over two years, while noting minimal exposure from China, representing only a couple of percentage points. -
Fresh 2.0 Initiative
Q: How successful is Fresh 2.0 impacting baskets?
A: Management described Fresh 2.0 as a breakthrough that not only boosts produce sales but also increases overall basket size by attracting loyal, frequent shoppers, as evidenced in the Florida test clubs. -
Margin & Earnings Guidance
Q: What are the expectations on margins and EPS?
A: They acknowledged a slight compression in merchandise margins due to rising commodity costs but expect sourcing improvements to help, with adjusted EPS guidance set at $4.10–$4.30 for fiscal 2025 and noted tax variations in Q3. -
Nationwide Expansion
Q: How viable is expanding clubs nationwide?
A: Management is confident in the nationwide club model, citing strong market demand even in competitive areas and planning accelerated expansion—with roughly $800 million CapEx—to support new club and gas station openings across diverse U.S. markets.
Research analysts covering BJ's Wholesale Club Holdings.